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Swiss Re profit falls as life proves a drag

Swiss Re has reported net income of $US3.5 billion ($4.49 billion) for last year, down 20% on 2013.

The fall is largely due to a loss of $US462 million ($592 million) in life and health, compared with net income of $US420 million ($539 million) the previous year.

This reflects action taken on pre-2004 US life business, including negotiations with clients to resolve underperforming books and the unwinding of an asset funding structure.

In contrast, property and casualty reinsurance increased net income by more than 12.5% to $US3.6 billion ($4.6 billion) last year thanks to a benign natural catastrophe experience and prior-year net reserve releases.

The division’s combined operating ratio improved slightly to 83.7% from 83.8%.

Swiss Re CEO Michel Liès says disciplined underwriting is key to generating strong earnings despite a challenging environment.

“In addition, we addressed issues in the underperforming areas,” he said. “As a result, we are confident in our ability to reach our 2011-2015 financial targets.”

The group has also announced a share buyback of 1 billion Swiss francs ($1.36 billion), given its “strong capital position”.